New law could put an end to rip-off property developers - but at a cost

The Housing Office is preparing a bill which would protect the public against property developers and housing cooperatives and make the tax allowance for buying flats on a mortgage more attractive. The head of the office and Deputy Infrastructure Minister Marek Bryx said that after the bill is passed, developers who sell flats publicly will not be able to receive money for the properties until all construction work is completed. Instead of paying up-front, buyers would make payments to a special interest bearing trust account in a bank. Only once the developers hand over the flats to the investors, a bank would transfer the money to the developer's account. Experts from the Housing Market Institute (IGM) argue that such a system may cause flat prices to increase by up to 10%. The bill would also lift the restrictions on writing-off interest on credit against one's annual taxable income. Currently those who take a credit to buy or build a property can deduct interest on credit only from the part of the credit which does not exceed the equivalent of the price of a flat of 70 square meters. According to the draft bill, one would be able to take advantage of this allowance more than once. (Gazeta Wyborcza, May 10-11, p. 26) K.S.